AsPac factory, services sectors to recover in H2 — IHS Markit

MANILA, Philippines — Activity in the manufacturing and services sectors in the Asia Pacific region is expected to recover in the second half as demand slowly recovers, according to market intelligence firm IHS Markit.

In a report, IHS Markit said the significant moderation in the number of coronavirus disease 2019 or COVID-19 cases in many major economies in the region in April and May “has created the platform for a gradual recovery of domestic demand during in the second half.”

IHS Markit  said that a rebound in  factory activity is now seen in China in response to strengthening domestic demand.

Japan has also lifted the state of emergency completely as the rise in the number of new cases has tapered off. South Korea has also contained its daily new cases, and has avoided imposing any strict lockdown so far.

Australia continues to contain new COVID-19 cases to very low daily levels. Meanwhile in New Zealand, no new COVID-19 cases have been reported for one month and the domestic lockdown has been completely lifted.

In the ASEAN region, Malaysia, Thailand and Vietnam have eased lockdown conditions, with Vietnam having had very few recorded COVID-19 cases to date.

In other areas like India and Indonesia, the number of new cases are still escalating because of large populations and densely populated urban areas.

The report does not mention the situation in the Philippines, but the number of new cases in the country also continues to rise.

“Overall, GDP growth momentum is expected to gradually improve in the APAC region during second half 2020, helped by improving domestic demand and an upturn in new export orders from key global markets, notably the US and EU, ” IHS Markit said.

“In 2021, renewed positive growth is forecast for APAC as the pandemic fades, with regional growth momentum buoyed by a strong economic rebound in China.”